<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 8, 1996
REGISTRATION NO. 333-09613
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM S-1
AMENDMENT NO. 2
TO
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
FAXSAV INCORPORATED
(Exact Name of Registrant as Specified in its Charter)
<TABLE>
<S> <C> <C>
DELAWARE 4822 11-3025769
(State or Other Jurisdiction (Primary Standard Industrial (I.R.S. Employer
of
Incorporation or Organization) Classification Code) Identification
Number)
</TABLE>
399 THORNALL STREET, EDISON, NEW JERSEY 08837
(908) 906-2000
(Address, including Zip Code, and Telephone Number, including Area Code,
of Registrant's Principal Executive Offices)
--------------------------
THOMAS F. MURAWSKI
President and Chief Executive Officer
FaxSav Incorporated
399 Thornall Street
Edison, New Jersey 08837
(908) 906-2000
(Name, Address, including Zip Code, and Telephone Number, including Area Code,
of Agent for Service)
--------------------------
COPIES TO:
<TABLE>
<S> <C>
Richard R. Plumridge, Esq. Gordon H. Hayes, Jr., Esq.
Michael A. Conza, Esq. Testa, Hurwitz & Thibeault, LLP
Brobeck, Phleger & Harrison LLP High Street Tower, 125 High Street
1301 Avenue of the Americas Boston, Massachusetts 02110
New York, New York 10019 (617) 248-7575
(212) 581-1600
</TABLE>
--------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
--------------------------
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
--------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SUCH SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable by the Registrant in connection
with the sale of Common Stock being registered. All amounts are estimates except
the SEC registration fee, the NASD filing fee and the Nasdaq National Market
listing fee.
<TABLE>
<CAPTION>
AMOUNT TO
BE PAID
------------
<S> <C>
SEC registration fee............................................................ $ 10,469
NASD filing fee................................................................. 3,536
Nasdaq National Market listing fee.............................................. 43,423
Printing and engraving.......................................................... 125,000
Legal fees and expenses......................................................... 275,000
Accounting fees and expenses.................................................... 200,000
Blue sky fees and expenses...................................................... 15,000
Directors and officers liability insurance...................................... 300,000
Transfer agent fees............................................................. 1,000
Miscellaneous................................................................... 26,572
------------
Total....................................................................... $ 1,000,000
------------
------------
</TABLE>
- ---------
* To be supplied by amendment.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law authorizes a court to
award or a corporation's Board of Directors to grant indemnification to
directors and officers in terms sufficiently broad to permit such
indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act of 1933,
as amended (the "Act"). Article IX of the Registrant's Sixth Amended and
Restated Certificate of Incorporation provides for indemnification of its
directors and officers and permissible indemnification of employees and other
agents to the maximum extent permitted by the Delaware General Corporation Law.
Reference is also made to Section 10 of the Underwriting Agreement contained in
Exhibit 1.1 hereto, which sets forth certain indemnification provisions. The
Registrant plans to obtain liability insurance for its officers and directors.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
The Registrant has sold and issued the following securities during the past
three years:
In October 1993, the Registrant issued warrants to purchase 87,570 shares of
Series D Preferred Stock at an exercise price of $0.1733 per share to an
equipment lessor.
In October and November 1993, warrants expiring ten years from the date of
grant were issued to certain existing preferred stockholders to acquire 321,086
shares of Series C Preferred Stock with an exercise price of $0.60 per share.
In January 1994, the Registrant issued 19,191,550 shares of Series D
Preferred Stock to 45 investors at a price of $0.1733 per share.
In May 1994, the Registrant issued warrants to purchase 89,000 shares of
Common Stock (before giving effect to the one-for-nine reverse stock split to be
effected prior to the closing of this offering) at an exercise price of $0.20 to
an equipment lessor.
In November 1994, the Registrant issued 7,241,343 shares of Series D
Preferred Stock to 47 investors at a price of $0.1733 per share.
II-1
<PAGE>
In January 1995, the Registrant issued 19,090,900 shares of Series E
Preferred Stock to 45 investors at a price of $0.22 per share.
In July 1995, the Company granted warrants to purchase 176,667 shares of
Common Stock (before giving effect to the one-for-nine reverse stock split to be
effected prior to the closing of this offering), exercisable for five years from
the date of grant at a price of $0.22 per share, to a bank in connection with
the issuance of a working capital line of credit.
In February and March 1996, the Registrant issued 19,999,988 shares of
Series F Preferred Stock to 68 investors at a price of $0.40 per share.
In August 1996, the Company issued an aggregate of 13,431 shares of Series C
Preferred Stock to six investors upon exercise of Series C Preferred Stock
warrants at an exercise price of $0.60 per share.
The Registrant from time to time has granted stock options to purchase
shares of Common Stock to employees, directors and consultants. The following
table sets forth certain information regarding such grants:
<TABLE>
<CAPTION>
RANGE OF
NO. OF EXERCISE
SHARES PRICES
------------ --------------
<S> <C> <C>
1993 (from June 30, 1993)............................................. 142,555 $0.90
1994.................................................................. 208,444 0.90
1995.................................................................. 610,790 0.225 - 0.90
1996 (through August 31, 1996)........................................ 222,889 0.90 - 3.60
</TABLE>
The Registrant from time to time has issued Common Stock to employees,
directors and consultants who have exercised their stock options. The following
table sets forth certain information regarding such issuances
<TABLE>
<CAPTION>
RANGE OF
NO. OF EXERCISE
SHARES PRICES
------------ --------------
<S> <C> <C>
1993 (from June 30, 1993)............................................. 48 $0.90
1994.................................................................. 2,978 0.90
1995.................................................................. -- --
1996 (through August 31, 1996)........................................ 51,156 0.225 - 0.90
</TABLE>
The above securities were offered and sold by the Registrant in reliance
upon an exemption from registration under either (i) Section 4(2) of the
Securities Act as transactions not involving any public offering or (ii) Rule
701 under the Securities Act. No underwriters were involved in connection with
the sales of securities referred to in this Item 15.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
- --------- ----------------------------------------------------------------------------------------------------
<C> <S>
1.1 Form of Underwriting Agreement.
3.1** Fifth Amended and Restated Certificate of Incorporation of the Registrant.
3.2** Form of Amendment to Fifth Amended and Restated Certificate of Incorporation of the Registrant to be
filed prior to the consummation of the public offering.
3.3** Form of Sixth Amended and Restated Certificate of Incorporation of the Registrant to be filed upon
the consummation of the public offering.
3.4** By-laws of the Registrant.
3.5** Form of Amendment to By-laws of the Registrant to be in effect upon the consummation of the public
offering.
4.1** Specimen Common Stock Certificate.
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
- --------- ----------------------------------------------------------------------------------------------------
4.2 See Exhibits 3.1, 3.2, 3.3, 3.4 and 3.5 for provisions of the Certificate of Incorporation and
Bylaws of the Registrant defining rights of holders of Common Stock of the Registrant.
<C> <S>
5.1 Opinion of Brobeck, Phleger & Harrison LLP.
10.1** Fifth Amended and Restated Investor Rights Agreement.
10.2** Amendment and waiver to Fifth Amended and Restated Investor Rights Agreement.
10.3** 1990 Stock Option Plan.
10.4** 1996 Stock Option/Stock Issuance Plan.
10.5** Form of Officer Severance Agreement.
10.6** Form of Director Severance Agreement.
10.7** Telstra Severance Agreement.
10.8+** Telecommunications Services Agreement, between Wiltel, Inc. and the Registrant, dated April 4, 1994.
10.9+** Agreement between MCI Telecommunications Corporation and the Registrant, effective March 1, 1996.
10.10** Lease Agreement, dated May 28, 1992, between Metro Four Associates Limited Partnership, Thornall
Associates and the Registrant, as extended and amended to date.
10.11** Credit Agreement, dated July 7, 1995, between the Company and Silicon Valley Bank, as amended to
date.
10.12** Letter Agreement, dated November 1, 1994 between Telstra Incorporated and the Registrant.
10.13** Form of Series C Warrant.
10.14** Series B Preferred Stock Warrant between the Registrant and Comdisco, Inc., dated May 30, 1991.
10.15** Series B Preferred Stock Warrant between the Registrant and Comdisco, Inc., dated September 16,
1992.
10.16** Series D Preferred Stock Warrant between the Registrant and Comdisco, Inc., dated October 28, 1993.
10.17** Common Stock Warrant between LTI Ventures Leasing Corp., dated February 15, 1993.
10.18** Common Stock Warrant between LTI Ventures Leasing Corp., dated May 5, 1994.
10.19** Common Stock Warrant between Silicon Valley Bancshares, dated April 6, 1992.
10.20** Common Stock Warrant between Silicon Valley Bancshares, dated July 7, 1995.
11.1** Statement re Computation of Per Share Earnings.
23.1 Consent of Coopers & Lybrand L.L.P.
23.3 Consent of Brobeck, Phleger & Harrison LLP (included in Exhibit 5.1).
24.** Power of Attorney.
27.** Financial Data Schedule.
</TABLE>
- ---------
** Previously filed.
+ Confidential treatment granted
(b) Financial Statement Schedule
Schedule II--Valuation of Qualifying Accounts
Report of Independent Accountants
Schedules not listed above have been omitted because the information
required to be set forth therein is not applicable or is shown in Financial
Statements or notes thereto.
II-3
<PAGE>
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes to provide to the Underwriters
at the closing specified in the Underwriting Agreement, certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the Delaware General Corporation Law, the Certificate of
Incorporation of the Registrant, the Underwriting Agreement, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act, and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered hereunder, the Registrant will,
unless in the opinion of counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes:
(1) That for purposes of determining any liability under the Act, the
information omitted from the form of Prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
Prospectus filed by the Registrant pursuant to Rule 424 (b) (1) or (4), or 497
(h) under the Act shall be deemed to be part of this Registration Statement as
of the time it was declared effective.
(2) That for the purpose of determining any liability under the Act, each
post-effective amendment that contains a form of Prospectus shall be deemed to
be a new Registration Statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment No. 2 to the Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized in The City of
Edison, State of New Jersey, on this 8th day of October, 1996.
FAXSAV INCORPORATED
By: /s/ PETER S. MACALUSO
-----------------------------------
Peter S. Macaluso
VICE PRESIDENT AND CHIEF FINANCIAL
OFFICER
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to the Registration Statement has been signed by the following persons in
the capacities indicated on October 8, 1996:
<TABLE>
<S> <C>
SIGNATURE TITLE(S)
- ------------------------------------------------------ ------------------------------------------------------
By: *
- --------------------------------------- Chief Executive Officer, President and Chairman of the
Thomas F. Murawski Board (Principal Executive Officer and Director)
By: /s/ PETER S. MACALUS Vice President and Chief Financial Officer (Principal
- --------------------------------------- Financial Officer and Principal Accounting Officer)
Peter S. Macaluso
By: *
- --------------------------------------- Director
Jeffrey M. Drazan
By: *
- --------------------------------------- Director
Peter A. Howley
By: *
- --------------------------------------- Director
Gregory Dunfield
By: *
- --------------------------------------- Director
Robert Labant
*By: /s/ PETER S. MACALUSO
- --------------------------------------
Peter S. Macaluso
ATTORNEY-IN-FACT
</TABLE>
II-5
<PAGE>
FAXSAV INCORPORATED
SUPPLEMENTAL SCHEDULE
VALUATION AND QUALIFYING ACCOUNTS
<TABLE>
<CAPTION>
ADDITIONS
-------------------------
<S> <C> <C> <C> <C> <C>
BALANCE AT CHARGES TO CHARGES TO BALANCE AT
BEGINNING COST AND OTHER END OF
OF PERIOD EXPENSES ACCOUNTS DEDUCTIONS PERIOD
------------ ----------- ------------ ----------- ------------
YEAR ENDED DECEMBER 31, 1993
Provisions for bad debts................ $ 18,948 $ 32,524 $ 37,542(a) $ 37,542(b) $ 51,472
Provision for FAXSAV CONNECTORS......... -- -- -- -- --
Accrual for legal defense............... -- -- -- -- --
Deferred tax asset valuation
allowance............................. 1,039,269 -- 1,335,396 -- 2,374,665
------------ ----------- ------------ ----------- ------------
$ 1,058,217 $ 32,524 $ 1,372,938 $ 37,542 $ 2,426,137
------------ ----------- ------------ ----------- ------------
------------ ----------- ------------ ----------- ------------
YEAR ENDED DECEMBER 31, 1994
Provisions for bad debts................ $ 51,472 $ 38,721 $ 45,252(a) $ 45,252(b) $ 90,193
Provision for FAXSAV CONNECTORS......... -- 61,559 -- -- 61,559
Accrual for legal defense............... -- -- -- -- --
Deferred tax asset valuation
allowance............................. 2,374,665 -- 1,659,234 -- 4,033,899
------------ ----------- ------------ ----------- ------------
$ 2,426,137 $ 100,280 $ 1,704,486 $ 45,252 $ 4,185,651
------------ ----------- ------------ ----------- ------------
------------ ----------- ------------ ----------- ------------
YEAR ENDED DECEMBER 31, 1995
Provisions for bad debts................ $ 90,193 $ 194,720 $ 20,397(a) $ 130,573(b) $ 174,737
Provision for FAXSAV CONNECTORS......... 61,559 230,416 -- -- 291,975
Accrual for legal defense............... -- 400,000 -- 5,000 395,000
Deferred tax asset valuation
allowance............................. 4,033,899 -- 1,628,194 -- 5,662,093
------------ ----------- ------------ ----------- ------------
$ 4,185,651 $ 825,136 $ 1,648,591 $ 135,573 $ 6,523,805
------------ ----------- ------------ ----------- ------------
------------ ----------- ------------ ----------- ------------
</TABLE>
- ---------
(a) Accounts receivable recoveries
(b) Write-offs
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Stockholders and
Board of Directors of FaxSav Incorporated:
In connection with our audits of the financial statements of FaxSav
Incorporated (formerly Digitran Corporation) as of December 31, 1995 and 1994,
and for each of the three years in the period ended December 31, 1995, which are
included in this Registration Statement, we have also audited the related
financial statement schedule listed under Item 16(b) of this Registration
Statement.
In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly, in all material respects, the information required to be
included therein.
COOPERS & LYBRAND L.L.P.
Parsippany, New Jersey
March 29, 1996
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
NUMBER DESCRIPTION PAGE
- --------- --------------------------------------------------------------------------------------------- -----------
<C> <S> <C>
1.1 Form of Underwriting Agreement.
3.1** Fifth Amended and Restated Certificate of Incorporation of the Registrant.
3.2** Form of Amendment to Fifth Amended and Restated Certificate of Incorporation of the
Registrant to be filed prior to the consummation of the public offering.
3.3** Form of Sixth Amended and Restated Certificate of Incorporation of the Registrant to be filed
upon the consummation of the public offering.
3.4** By-laws of the Registrant.
3.5** Form of Amendment to By-laws of the Registrant to be in effect upon the consummation of the
public offering.
4.1** Specimen Common Stock Certificate.
4.2 See Exhibits 3.1, 3.2, 3.3, 3.4 and 3.5 for provisions of the Certificate of Incorporation
and Bylaws of the Registrant defining rights of holders of Common Stock of the Registrant.
5.1 Opinion of Brobeck, Phleger & Harrison LLP.
10.1** Fifth Amended and Restated Investor Rights Agreement.
10.2** Amendment and waiver to Fifth Amended and Restated Investor Rights Agreement.
10.3** 1990 Stock Option Plan.
10.4** 1996 Stock Option/Stock Issuance Plan.
10.5** Form of Officer Severance Agreement.
10.6** Form of Director Severance Agreement.
10.7** Telstra Severance Agreement.
10.8+** Telecommunications Services Agreement, between Wiltel, Inc. and the Registrant, dated April
4, 1994.
10.9+** Agreement between MCI Telecommunications Corporation and the Registrant, effective March 1,
1996.
10.10** Lease Agreement, dated May 28, 1992, between Metro Four Associates Limited Partnership,
Thornall Associates and the Registrant, as extended and amended to date.
10.11** Credit Agreement, dated July 7, 1995, between the Company and Silicon Valley Bank, as amended
to date.
10.12** Letter Agreement, dated November 1, 1994 between Telstra Incorporated and the Registrant.
10.13** Form of Series C Warrant.
10.14** Series B Preferred Stock Warrant between the Registrant and Comdisco, Inc., dated May 30,
1991.
10.15** Series B Preferred Stock Warrant between the Registrant and Comdisco, Inc., dated September
16, 1992.
10.16** Series D Preferred Stock Warrant between the Registrant and Comdisco, Inc., dated October 28,
1993.
10.17** Common Stock Warrant between LTI Ventures Leasing Corp., dated February 15, 1993.
10.18** Common Stock Warrant between LTI Ventures Leasing Corp., dated May 5, 1994.
10.19** Common Stock Warrant between Silicon Valley Bancshares, dated April 6, 1992.
10.20** Common Stock Warrant between Silicon Valley Bancshares, dated July 7, 1995.
11.1** Statement re Computation of Per Share Earnings.
23.1 Consent of Coopers & Lybrand L.L.P.
23.3 Consent of Brobeck, Phleger & Harrison LLP (included in Exhibit 5.1).
24.** Power of Attorney.
27.** Financial Data Schedule.
</TABLE>
- ------------------------
** Previously filed.
+ Confidential treatment granted
<PAGE>
DRAFT 10/3/96 Exhibit 1.1
2,200,000 Shares
FAXSAV INCORPORATED
Common Stock
UNDERWRITING AGREEMENT
______ ___,1996
LEHMAN BROTHERS INC.
ALEX. BROWN & SONS INCORPORATED
As Representatives of the several
Underwriters named in Schedule 1,
c/o Lehman Brothers Inc.
Three World Financial Center
New York, New York 10285
Dear Sirs:
FaxSav Incorporated, a Delaware corporation (the "Company"), proposes to sell an
aggregate of 2,200,000 shares (the "Firm Stock") of the Company's Common Stock,
par value $.01 per share (the "Common Stock"). In addition, Telstra Holdings
Pty. (the "Selling Stockholder") proposes to grant to the Underwriters named in
Schedule I hereto (the "Underwriters") an option to purchase up to an additional
330,000 shares of the Common Stock on the terms and for the purposes set forth
in Section 3 (the "Option Stock"). The Firm Stock and the Option Stock, if
purchased, are hereinafter collectively called the "Stock." This is to confirm
the agreement concerning the purchase of the Stock from the Company and the
Selling Stockholder by the Underwriters named in Schedule I hereto (the
"Underwriters").
1. Representations, Warranties and Agreements of the Company. The
Company represents, warrants and agrees that:
(a) Each of the registration statement on Form S-1, and any
registration statement filed pursuant to Rule 462(b) of the Rules and
Regulations as hereinafter defined, and any amendments thereto, with
respect to the Stock has (i) been prepared by the Company in conformity
with the requirements of the United States Securities Act of 1933 (the
"Securities Act") and the rules and regulations (the "Rule and
Regulations") of the United States Securities and Exchange Commission (the
"Commission") thereunder, (ii) been filed with the Commission under the
Securities Act and (iii) become effective under the Securities Act. Copies
of each of such registration statement, including any registration
statement filed pursuant to Rule 462(b), and the amendments thereto have
been delivered by the Company to you as the representatives (the
"Representatives") of the Underwriters and such copies, to the extent
applicable, were identical to the electronically transmitted copies thereof
filed with the Commission pursuant to the Commission's Electronic Data
Gathering, Analysis and Retrieval System ("EDGAR"),
<PAGE>
except to the extent permitted by Regulation S-T. As used in this
Agreement, "Effective Time" means the date and the time as of which such
registration statement, or the most recent post-effective amendment
thereto, if any, was declared effective by the Commission; "Effective Date"
means the date of the Effective Time; "Preliminary Prospectus" means each
prospectus included in such registration statement, or amendments thereof,
before it became effective under the Securities Act and any prospectus
filed with the Commission by the Company with the consent of the
Representatives pursuant to Rule 424(a) of the Rules and Regulations;
"Registration Statement" means such registration statement, as amended at
the Effective Time, including all information contained in the final
prospectus filed with the Commission pursuant to Rule 424(b) of the Rules
and Regulations in accordance with Section hereof and deemed to be a part
of the registration statement as of the Effective Time pursuant to
paragraph (b) of Rule 430A of the Rules and Regulations; "Rule 462(b)
Registration Statement" means any registration statement filed pursuant to
Rule 462(b) of the Rules and Regulations, and after such filing, the term
"Registration Statement" shall include the Rule 462(b) Registration
Statement; and "Prospectus" means such final prospectus, as first filed
with the Commission pursuant to paragraph (1) or (4) of Rule 424(b) of the
Rules and Regulations. The Commission has not issued any order preventing
or suspending the use of any Preliminary Prospectus. For purposes of this
Agreement, all references to any Preliminary Prospectus, the Registration
Statement, any Rule 462(b) Registration Statement, the Prospectus, or any
amendment or supplement to any of the foregoing, shall be deemed to include
the respective copies thereof filed with the Commission pursuant to EDGAR.
(b) The Registration Statement, including any Rule 462(b) Registration
Statement, conforms, and the Prospectus and any further amendments or
supplements to the Registration Statement, including any Rule 462(b)
Registration Statement, or the Prospectus will, when they become effective
or are filed with the Commission, as the case may be, conform in all
material respects to the requirements of the Securities Act and the Rules
and Regulations and do not and will not, as of the applicable effective
date (as to the Registration Statement and any amendment thereto) and as of
the applicable filing date (as to the Prospectus and any amendment or
supplement thereto) contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading; provided that no representation or
warranty is made as to information contained in or omitted from the
Registration Statement, including any Rule 462(b) Registration Statement,
or the Prospectus in reliance upon and in conformity with written
information furnished to the Company through the Representatives by or on
behalf of any Underwriter specifically for inclusion therein.
(c) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of its jurisdiction of
incorporation, is duly qualified to do business and is in good standing as
a foreign corporation in each jurisdiction in which its ownership or lease
of property or the conduct of its business
- 2 -
<PAGE>
requires such qualification, except where the failure to be so qualified or
be in good standing would not have a material adverse effect on the
financial position, stockholders' equity or results of operations of the
Company, and has all power and authority necessary to own or hold its
properties and to conduct the business in which it is engaged; and the
Company has no subsidiaries.
(d) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued, are fully paid and
non-assessable and conform to the description thereof contained in the
Prospectus.
(e) The unissued shares of the Stock to be issued and sold by the
Company to the Underwriters hereunder have been duly and validly authorized
and, when issued and delivered against payment therefor as provided herein,
will be duly and validly issued, fully paid and non-assessable; and the
Stock will conform to the descriptions thereof contained in the Prospectus.
(f) This Agreement has been duly authorized, executed and delivered by
the Company.
(g) The execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby and
the charter amendment and stock split described in the Prospectus (such
charter amendment and stock split are herein collectively called the "Stock
Split") will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company is a party or by which the Company is bound or to which
any of the property or assets of the Company is subject, nor will such
actions result in any violation of the provisions of the charter or by-laws
of the Company or any statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Company or any
of its properties or assets except where the violation would not have a
material adverse effect on the financial position, stockholders' equity or
results of operations of the Company; and except for the registration of
the Stock under the Securities Act and such consents, approvals,
authorizations, registrations or qualifications as may be required under
the Exchange Act, under the by-laws or rules of the National Association of
Securities Dealers, Inc. applicable to the corporate finance arrangements
contemplated hereby, and under applicable state or foreign securities laws
in connection with the purchase and distribution of the Stock by the
Underwriters, no consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is
required for the execution, delivery and performance of this Agreement by
the Company and the consummation of the transactions contemplated hereby.
(h) Except as described in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person granting
such person the right (other than rights which have been waived or
satisfied) to require the Company to file a
- 3 -
<PAGE>
registration statement under the Securities Act with respect to any
securities of the Company owned or to be owned by such person or to require
the Company to include such securities with the securities registered
pursuant to the Registration Statement or with any securities being
registered pursuant to any other registration statement filed by the
Company under the Securities Act.
(i) Except as described in the Prospectus, the Company has not sold or
issued any shares of Common Stock during the six-month period preceding the
date of the prospectus, including any sales pursuant to Rule 144A under, or
Regulations D or S of, the Securities Act, other than shares issued
pursuant to employee benefit plans, qualified stock options plans or other
employee compensation plans or pursuant to outstanding options, rights or
warrants.
(j) The Company has not sustained, since the date of the latest
audited financial statements included in the Prospectus, any material loss
or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus; and, since such date, there has not been
any material change in the capital stock or long-term debt of the Company
or any material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of the
Company, otherwise than as set forth or contemplated in the Prospectus.
(k) The financial statements (including the related notes and
supporting schedule) filed as part of the Registration Statement or
included in the Prospectus present fairly the financial condition and
results of operations of the entities purported to be shown thereby, at the
dates and for the periods indicated, and have been prepared in conformity
with generally accepted accounting principles applied on a consistent basis
throughout the periods involved.
(l) Coopers & Lybrand L.L.P., who have certified certain financial
statements of the Company, whose report appears in the Prospectus and who
have delivered the initial letter referred to in Section 9(h) hereof, are
independent public accountants as required by the Securities Act and the
Rules and Regulations.
(m) The Company has good and marketable title to all personal property
owned by it, in each case free and clear of all liens, encumbrances and
defects except such as are described in the Prospectus or such as do not
materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by the
Company; and all real property and buildings held under lease by the
Company are held by it under valid, subsisting and enforceable leases, with
such exceptions as are not material and do not interfere with the use made
and proposed to be made of such property and buildings by the Company.
- 4 -
<PAGE>
(n) The Company carries or is covered by, insurance in such amounts and
covering such risks as is reasonably believed by the Company to be adequate
for the conduct of its business and the value of its properties and as is
reasonably believed by the Company to be customary for companies engaged in
similar businesses in similar industries.
(o) Except as disclosed in or specifically contemplated by the
Prospectus, the Company owns or possesses adequate rights to use all
trademarks, trademark applications, trade names, service marks, patents,
patent applications, patent rights, copyrights, inventions, trade secrets,
know how, licenses, approvals and governmental authorizations that are
necessary to conduct their business as described in the Registration
Statement and Prospectus; to the knowledge of the Company, none of the
patents owned or licensed by the Company are unenforceable or invalid; the
Company has duly and properly filed or caused to be filed with the United
States Patent and Trademark Office (the "PTO") all patent applications
described or referred to in the Prospectus, and believes it has complied
with the PTO's duty of candor and disclosure for each of its United States
patent applications; the Company is unaware of any facts which would
preclude the grant of a patent from any of its patent applications; the
Company has no knowledge of any facts which would preclude it from having
clear title to its patent applications referenced in the Prospectus; except
as disclosed in the Prospectus, the Company has no knowledge of, and has
received no notice of, any material infringement or misappropriation by the
Company of any trademark, trademark application, trade name, service mark,
patent, patent application, patent right, mask work, copyright, invention,
know how, license, trade secret or other similar rights of others, and
there is no claim being made against the Company regarding trademark,
trademark application, trade name, service mark, patent, patent
application, mask work, copyright, license, trade secret or other
infringement which is reasonably likely to have a material adverse effect
on the financial position, stockholders' equity or results of operations of
the Company; the Company has not terminated or breached and is not in
violation of any agreement covering its intellectual property rights; and
the Company is not aware of the granting of any patents to third parties or
the filing of patent applications by third parties or any other rights of
third parties to any of the Company's intellectual property.
(p) There are no legal or governmental proceedings pending to which
the Company is a party or of which any property or assets of the Company is
the subject which, if determined adversely to the Company, might have a
material adverse effect on the financial position, stockholders' equity,
results of operations, business or prospects of the Company; and to the
best of the Company's knowledge and except as disclosed in the Prospectus,
no such proceedings are threatened or contemplated by governmental
authorities or threatened by others.
(q) There are no contracts or other documents which are required to be
described in the Prospectus or filed as exhibits to the Registration
Statement by the Securities Act or by the Rules and Regulations which have
not been described in the Prospectus or filed as exhibits to the
Registration Statement.
- 5 -
<PAGE>
(r) No relationship, direct or indirect, exists between or among the
Company on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company on the other hand, which is required
to be described in the Prospectus which is not so described.
(s) No labor disturbance by the employees of the Company exists or, to
the knowledge of the Company, is imminent which might be expected to have a
material adverse effect on the financial position, stockholders' equity,
results of operations, business or prospects of the Company.
(t) The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security
Act of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"); no "reportable event" (as defined in
ERISA) has occurred with respect to any "defined benefit plan" (as defined
in ERISA) for which the Company would have any liability; the Company has
not incurred and does not expect to incur liability under (i) Title IV of
ERISA with respect to termination of, or withdrawal from, any "defined
benefit plan" or (ii) Sections 412 or 4971 of the Internal Revenue Code of
1986, as amended, including the regulations and published interpretations
thereunder (the "Code"); and each "pension plan" for which the Company
would have any liability that is intended to be qualified under Section
401(a) of the Code is so qualified in all material respects and nothing has
occurred, whether by action or by failure to act, which would cause the
loss of such qualification.
(u) The Company has filed all federal, state and local income and
franchise tax returns required to be filed through the date hereof and has
paid all taxes due thereon, and no tax deficiency has been determined
adversely to the Company which has had (nor does the Company have any
knowledge of any tax deficiency which, if determined adversely to the
Company, might have) a material adverse effect on the financial position,
stockholders' equity, results of operations, business or prospects of the
Company.
(v) Since the date as of which information is given in the Prospectus
through the date hereof, and except as may otherwise be disclosed in the
Prospectus, the Company has not (i) issued or granted any securities, (ii)
incurred any liability or obligation, direct or contingent, other than
liabilities and obligations which were incurred in the ordinary course of
business, (iii) entered into any transaction not in the ordinary course of
business or (iv) declared or paid any dividend on its capital stock.
(w) The Company (i) makes and keeps accurate books and records and
(ii) maintains internal accounting controls which provide reasonable
assurance that (A) transactions are executed in accordance with
management's authorization, (B) transactions are recorded as necessary to
permit preparation of its financial statements and to maintain
accountability for its assets, (C) access to its assets is permitted only
in
- 6 -
<PAGE>
accordance with management's authorization and (D) the reported
accountability for its assets is compared with existing assets at
reasonable intervals.
(x) The Company (i) is not in violation of its charter or by-laws,
(ii) is not in default in any material respect, and no event has occurred
which, with notice or lapse of time or both, would constitute such a
default, in the due performance or observance of any term, covenant or
condition contained in any material indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which it is a party or
by which it is bound or to which any of its properties or assets is subject
or (iii) is not in violation of any law, ordinance, governmental rule,
regulation or court decree to which it or its property or assets may be
subject, except where the violation would not have a material adverse
effect on the financial position, stockholders' equity or results of
operations of the Company.
(y) Neither the Company nor any director, officer, agent, employee or
other person associated with or acting on behalf of the Company, has used
any corporate funds for any unlawful contribution, gift, entertainment or
other unlawful expense relating to political activity; made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; violated or is in violation of any provision
of the Foreign Corrupt Practices Act of 1977; or made any bribe, rebate,
payoff, influence payment, kickback or other unlawful payment.
(z) There has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of toxic wastes, medical
wastes, hazardous wastes or hazardous substances by the Company (or, to the
knowledge of the Company, any of their predecessors in interest) at, upon
or from any of the property now or previously leased by the Company in
violation of any applicable law, ordinance, rule, regulation, order,
judgment, decree or permit or which would require remedial action under any
applicable law, ordinance, rule, regulation, order, judgment, decree or
permit, except for any violation or remedial action which would not have,
or could not be reasonably likely to have, singularly or in the aggregate
with all such violations and remedial actions, a material adverse effect on
the general affairs, management, financial position, stockholders' equity
or results of operations of the Company; and the terms "hazardous wastes",
"toxic wastes", "hazardous substances" and "medical wastes" shall have the
meanings specified in any applicable local, state, federal and foreign laws
or regulations with respect to environmental protection.
(aa) The Company is not an "investment company" within the meaning of
such term under the Investment Company Act of 1940 and the rules and
regulations of the Commission thereunder.
(ab) The Company owns or possesses and is operating in material
compliance with the terms, provisions and conditions of all necessary
licenses, certificates and permits from governmental authorities that are
material to the conduct of its business as described in the Prospectus,
including, but not limited to, all licenses required by the
- 7 -
<PAGE>
Federal Communications Commission ("FCC") or similar state regulatory
agencies. There is no proceeding pending or, to the knowledge of the
Company, threatened (or any basis therefor) which may cause any such
license, certificate or permit that is material to the conduct of the
business of the Company as presently conducted to be revoked, withdrawn,
cancelled, suspended or not renewed. The Company is conducting its business
in compliance with all laws, rules and regulations applicable thereto, the
violation of which, would materially adversely affect the Company.
2. Representations, Warranties and Agreements of the Selling
Stockholder. The Selling Stockholder severally represents, warrants and agrees
that:
(a) The Selling Stockholder has, and immediately prior to the First
Delivery Date (as defined in Section 5 hereof) the Selling Stockholder will
have good and valid title to the shares of Stock to be sold by the Selling
Stockholder hereunder on such date, free and clear of all liens,
encumbrances, equities or claims; and upon delivery of such shares and
payment therefor pursuant hereto, good and valid title to such shares, free
and clear of all liens, encumbrances, equities or claims, will pass to the
several Underwriters.
(b) The Selling Stockholder has placed in custody under a custody
agreement (the "Custody Agreement") with the Company, as custodian (the
"Custodian"), for delivery under this Agreement, certificates in negotiable
form (with signature guaranteed by a commercial bank or a trust company
having an office or correspondent in the United States or a member firm of
the New York or American Stock Exchanges) representing the shares of Stock
to be sold by the Selling Stockholder hereunder.
(c) The Selling Stockholder has duly and irrevocably executed and
delivered a power of attorney (the "Power of Attorney") appointing the
Custodian and one or more other persons, as attorneys-in-fact, with full
power of substitution, and with full authority (exercisable by any one or
more of them) to execute and deliver this Agreement and to take such other
action as may be necessary or desirable to carry out the provisions hereof
on behalf of the Selling Stockholder.
(d) The Selling Stockholder has full right, power and authority to
enter into this Agreement, the Power of Attorney and the Custody Agreement;
the execution, delivery and performance of this Agreement, the Power of
Attorney and the Custody Agreement by the Selling Stockholder and the
consummation by the Selling Stockholder of the transactions contemplated
hereby and thereby will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Selling Stockholder is a party or by
which the Selling Stockholder is bound or to which any of the property or
assets of the Selling Stockholder is subject, nor will such actions result
in any violation of the provisions of the charter or by-laws of the Selling
Stockholder, or any statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Selling
Stockholder or the property or assets of the Selling Stockholder; and,
except for the registration of the Stock under the
- 8 -
<PAGE>
Securities Act and such consents, approvals, authorizations, registrations
or qualifications as may be required under the Exchange Act and applicable
state or foreign securities laws in connection with the purchase and
distribution of the Stock by the Underwriters, no consent, approval,
authorization or order of, or filing or registration with, any such court
or governmental agency or body is required for the execution, delivery and
performance of this Agreement, the Power of Attorney or the Custody
Agreement by the Selling Stockholder and the consummation by the Selling
Stockholder of the transactions contemplated hereby and thereby.
(e) To the Selling Stockholder's knowledge, without independent
inquiry, the Registration Statement and the Prospectus and any further
amendments or supplements to the Registration Statement or the Prospectus
will, when they become effective or are filed with the Commission, as the
case may be, do not and will not, as of the applicable effective date (as
to the Registration Statement and any amendment thereto) and as of the
applicable filing date (as to the Prospectus and any amendment or
supplement thereto) contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading; provided that no representation or
warranty is made as to information contained in or omitted from the
Registration Statement or the Prospectus in reliance upon and in conformity
with written information furnished to the Company through the
Representatives by or on behalf of any Underwriter specifically for
inclusion therein.
(f) To the Selling Stockholder's knowledge, without independent
inquiry, there is no material fact, condition or information not disclosed
in the Registration Statement, as of the effective date, or the Prospectus
(or any amendment or supplement thereto), as of the applicable filing date,
which has adversely affected or may adversely affect the business of the
Company and the Selling Stockholder is not prompted to sell shares of
Common Stock by any information concerning the Company which is not set
forth in the Registration Statement and the Prospectus.
(g) The Selling Stockholder has not taken and will not take, directly
or indirectly, any action which is designed to or which has constituted or
which might reasonably be expected to cause or result in the stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the shares of the Stock.
3. Purchase of the Stock by the Underwriters. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 2,200,000 shares of
the Firm Stock to the several Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase the number of shares of the Firm
Stock set opposite that Underwriter's name in Schedule 1 hereto. The respective
purchase obligations of the Underwriters with respect to the Firm Stock shall be
rounded among the Underwriters to avoid fractional shares, as the
Representatives may determine.
In addition, the Selling Stockholder grants to the Underwriters an
option to purchase up to 330,000 shares of Option Stock. Such option is granted
solely for the purpose of
- 9 -
<PAGE>
covering overallotments in the sale of Firm Stock and is exercisable as provided
in Section 5 hereof. Shares of Option Stock shall be purchased severally for the
account of the Underwriters in proportion to the number of shares of Firm Stock
set opposite the name of such Underwriters in Schedule 1 hereto. The respective
purchase obligations of each Underwriter with respect to the Option Stock shall
be adjusted by the Representatives so that no Underwriter shall be obligated to
purchase Option Stock other than in 100 share amounts. The price of both the
Firm Stock and any Option Stock shall be $_____ per share.
4. Offering of Stock by the Underwriters. Upon authorization by the
Representatives of the release of the Firm Stock, the several underwriters
propose to offer the Firm Stock for sale upon the terms and conditions set forth
in the Prospectus.
5. Delivery of and Payment for the Stock. Delivery of and payment for
the Firm Stock shall be made at the office of Brobeck Phleger & Harrison, LLP,
1301 Avenue of the Americas, New York, NY 10019, at 10:00 A.M., New York City
time, on the third full business day (unless otherwise required by the
Commission pursuant to Rule 15c6-1 of the Exchange Act) following the date of
this Agreement or at such other date or place as shall be determined by
agreement between the Representatives and the Company. This date and time are
sometimes referred to as the First Delivery Date." On the First Delivery Date,
the Company shall deliver or cause to be delivered certificates representing the
Firm Stock to the Representatives for the account of each Underwriter against
payment to or upon the order of the Company of the purchase price by wire
transfer in same-day funds. Time shall be of the essence, and delivery at the
time and place specified pursuant to this Agreement is a further condition of
the obligation of each Underwriter hereunder. Upon delivery, the Firm Stock
shall be registered in such names and in such denominations as the
Representatives shall request in writing not less than two full business days
prior to the First Delivery Date. For the purpose of expediting the checking and
packaging of the certificates for the Firm Stock, the Company shall make the
certificates representing the Firm Stock available for inspection by the
Representatives in New York, New York, not later than 2:00 P.M., New York City
time, on the business day prior to the First Delivery Date.
At any time on or before the thirtieth day after the date of this
Agreement the option granted in Section 3 may be exercised by written notice
being given to the Company and the Selling Stockholder by the Representatives.
Such notice shall set forth the aggregate number of shares of Option Stock as to
which the option is being exercised, the names in which the shares of Option
Stock are to be registered, the denominations in which the shares of Option
Stock are to be issued and the date and time, as determined by the
Representatives, when the shares of Option Stock are to be delivered; provided,
however, that this date and time shall not be earlier than the First Delivery
Date nor earlier than the second business day after the date on which the option
shall have been exercised nor later than the third business day after the date
on which the option shall have been exercised. The date and time the shares of
Option Stock are delivered are sometimes referred to as the "Second Delivery
Date" and the First Delivery Date and the Second Delivery Date are sometimes
each referred to as a "Delivery Date").
- 10 -
<PAGE>
Delivery of and payment for the Option Stock shall be made at the place
specified in the first sentence of the first paragraph of this Section 5 (or at
such other place as shall be determined by agreement between the Representatives
and the Company) at 10:00 A.M., New York City time, on the Second Delivery Date.
On the Second Delivery Date, the Selling Stockholder shall deliver or cause to
be delivered the certificates representing the Option Stock to the
Representatives for the account of each Underwriter against payment to or upon
the order of the Selling Stockholder of the purchase price by wire transfer in
same-day funds. Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the obligation of
each Underwriter hereunder. Upon delivery, the Option Stock shall be registered
in such names and in such denominations as the Representatives shall request in
the aforesaid written notice. For the purpose of expediting the checking and
packaging of the certificates for the Option Stock, the Selling Stockholder
shall make the certificates representing the Option Stock available for
inspection by the Representatives in New York, New York, not later than 2:00
P.M., New York City time, on the business day prior to the Second Delivery Date.
6. Further Agreements of the Company. The Company agrees:
(a) To prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under
the Securities Act not later than Commission's close of business on the
second business day following the execution and delivery of this Agreement
or, if applicable, such earlier time as may be required by Rule 430A(a)(3)
under the Securities Act; to make no further amendment or any supplement to
the Registration Statement or to the Prospectus except as permitted herein;
to advise the Representatives, promptly after it receives notice thereof,
of the time when any amendment to the Registration Statement or any Rule
462(b) Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed and
to furnish the Representatives with copies thereof; to advise the
Representatives, promptly after it receives notice thereof, of the issuance
by the Commission of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus, of the
suspension of the qualification of the Stock for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any
such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or the Prospectus or for
additional information; and, in the event of the issuance of any stop order
or of any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus or suspending any such qualification, to use
promptly its best efforts to obtain its withdrawal;
(b) To furnish promptly to each of the Representatives and to counsel
for the Underwriters a signed copy of the Registration Statement, including
any Rule 462(b) Registration Statement, as originally filed with the
Commission, and each amendment thereto filed with the Commission, including
all consents and exhibits filed therewith;
(c) To deliver promptly to the Representatives such number of the
following documents as the Representatives shall reasonably request: (i)
conformed copies of the Registration Statement, including any Rule 462(b)
Registration Statement, as originally
- 11 -
<PAGE>
filed with the Commission and each amendment thereto (in each case
excluding exhibits other than this Agreement and the computation of per
share earnings) and, (ii) each Preliminary Prospectus, the Prospectus and
any amended or supplemented Prospectus; and, if the delivery of a
prospectus is required at any time after the Effective Time in connection
with the offering or sale of the Stock or any other securities relating
thereto and if at such time any events shall have occurred as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is delivered,
not misleading, or, if for any other reason it shall be necessary to amend
or supplement the Prospectus in order to comply with the Securities Act, to
notify the Representatives and, upon their request, to prepare and furnish
without charge to each Underwriter and to any dealer in securities as many
copies as the Representatives may from time to time reasonably request of
an amended or supplemented Prospectus which will correct such statement or
omission or effect such compliance. To the extent applicable, the copies of
the Registration Statement and each amendment thereto (including all
exhibits filed therewith), including any Rule 462(b) Registration
Statement, any Preliminary Prospectus or Prospectus (in each case, as
amended or supplemented) furnished to the Underwriters and counsel to the
Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T;
(d) To file promptly with the Commission any amendment to the
Registration Statement, including any filing required under Rule 462(b), or
the Prospectus or any supplement to the Prospectus that may, in the
judgment of the Company or the Representatives, be required by the
Securities Act or requested by the Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement, including any filing required under Rule 462(b), or
supplement to the Prospectus or any Prospectus pursuant to Rule 424 of the
Rules and Regulations, to furnish a copy thereof to the Representatives and
counsel for the Underwriters and obtain the consent of the Representatives
to the filing;
(f) As soon as practicable after the Effective Date, to make generally
available to the Company's security holders and to deliver to the
Representatives an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11 (a) of the Securities
Act and the Rules and Regulations (including, at the option of the Company,
Rule 158);
(g) For a period of five years following the Effective Date, to
furnish to the Representatives copies of all materials furnished by the
Company to its shareholders and all public reports and all reports and
financial statements furnished by the Company to the principal national
securities exchange upon which the Common Stock may be listed pursuant to
requirements of or agreements with such exchange or to the Commission
pursuant to the Exchange Act or any rule or regulation of the Commission
thereunder;
- 12 -
<PAGE>
To the extent applicable, such reports or documents shall be identical to
the electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T;
(h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Stock for offering
and sale under the securities laws of such jurisdictions as the
Representatives may request and to comply with such laws so as to permit
the continuance of sales and dealings therein in such jurisdictions for as
long as may be necessary to complete the distribution of the Stock, except
that the Company shall not be required in connection therewith or as a
condition thereof to qualify as a foreign corporation or to execute a
general consent to service of process in any jurisdiction in which it is
not otherwise required to be so qualified or to so execute a general
consent to service of process;
(i) For a period of 180 days from the date of the Prospectus, not to
offer for sale, sell or otherwise dispose of (or enter into any transaction
which is designed to, or could be expected to, result in the disposition by
any person of), directly or indirectly, any shares of Common Stock (other
than the Stock and shares issued pursuant to employee benefit plans,
qualified stock option plans or other employee compensation plans existing
on the date hereof or pursuant to currently outstanding options, warrants
or rights), or sell or grant options, rights or warrants with respect to
any shares of Common Stock (other than the grant of options pursuant to
option plans existing on the date hereof), without the prior written
consent of Lehman Brothers Inc.; and to cause each officer and director of
the Company to furnish to the Representatives, prior to the First Delivery
Date, a letter or letters, in form and substance satisfactory to counsel
for the Underwriters, pursuant to which each such person shall agree not to
offer for sale, sell or otherwise dispose of (or enter into any transaction
which is designed to, or could be expected to, result in the disposition by
any person of), directly or indirectly, any shares of Common Stock for a
period of 180 days from the date of the Prospectus, without the prior
written consent of Lehman Brothers Inc.;
(j) Prior to the Effective Date, to apply for the listing of the Stock
on the Nasdaq National Market and to use its best efforts to complete that
listing, subject only to official notice of issuance and evidence of
satisfactory distribution, prior to the First Delivery Date;
(k) Prior to filing with the Commission any reports on Form SR
pursuant to Rule 463 of the Rules and Regulations, to furnish a copy
thereof to the counsel for the Underwriters, and to deliver promptly to the
Representatives a signed copy of each report on Form SR filed by it with
the Commission;
(l) To apply the net proceeds from the sale of the Stock being sold by
the Company substantially as set forth in the Prospectus;
- 13 -
<PAGE>
(m) To take such steps as shall be necessary to ensure that the
Company shall not become an "investment company" within the meaning of such
term under the Investment Company Act of 1940 and the rules and regulations
of the Commission thereunder; and
(n) For a period of 180 days from the date of the Prospectus, not to
release any person from their contractual "lock-up" obligations under
Section 3.15 of that certain Fifth Amended and Restated Investor Rights
Agreement dated as of February 28, 1996 by and among the Company and
certain stockholders of the Company, as such Agreement shall be amended
from time to time, without the prior written consent of Lehman Brothers
Inc.
7. Further Agreements of the Selling Stockholder. The Selling
Stockholder agrees:
(a) For a period of 180 days from the date of the Prospectus, not to
offer for sale, sell or otherwise dispose of (or enter into any transaction
which is designed to, or could be expected to, result in the disposition by
any person of), directly or indirectly, any shares of Common Stock (other
than the Stock), without the prior written consent of Lehman Brothers Inc.
(b) That the Stock to be sold by the Selling Stockholder hereunder,
which is represented by the certificates held in custody for the Selling
Stockholder, is subject to the interest of the Underwriters, that the
arrangements made by the Selling Stockholder for such custody are to that
extent irrevocable, and that the obligations of the Selling Stockholder
hereunder shall not be terminated by any act of the Selling Stockholder, by
operation of law, or the occurrence of any other event.
(c) To deliver to the Representatives prior to the First Delivery Date
a properly completed and executed United States Treasury Department Form
W-8 (if the Selling Stockholder is a non-United States person) or Form W-9
(if the Selling Stockholder is a United States person).
8. Expenses. The Company agrees to pay (a) the costs incident to the
authorization, issuance, sale and delivery of the Stock and any taxes payable in
that connection; (b) the costs incident to the preparation, printing and filing
under the Securities Act of the Registration Statement and any amendments and
exhibits thereto; (c) the costs of distributing the Registration Statement as
originally filed and each amendment thereto and any post-effective amendments
thereof (including, in each case, exhibits), any Preliminary Prospectus, the
Prospectus and any amendment or supplement to the Prospectus, all as provided in
this Agreement; (d) the costs of producing and distributing this Agreement, and
any other related documents in connection with the offering, purchase, sale and
delivery of the stock; (e) the costs of delivering and distributing the Custody
Agreements and the Powers of Attorney; (f) the filing fees incident to securing
any required review by the National Association of Securities Dealers, Inc. of
the terms of sale of the Stock; (g) any applicable listing or other fees
relating to the listing of the Stock on the Nasdaq
- 14 -
<PAGE>
National Market; (h) the fees and expenses of qualifying the Stock under the
securities laws of the several jurisdictions as provided in Section 6(h) and of
preparing, printing and distributing a Blue Sky Memorandum (including related
reasonable fees and expenses of counsel to the Underwriters); (k) all other
costs and expenses incident to the performance of the obligations of the Company
and the Selling Stockholder under this Agreement; provided that, except as
provided in this Section 8 and in Section 14 the Underwriters shall pay their
owns costs and expenses, including the costs and expenses of their counsel, any
transfer taxes on the Stock which they may sell and the expenses of advertising
any offering of the Stock made by the Underwriters, and the Selling Stockholder
shall pay the fees and expenses of its counsel to the extent it shall retain
counsel other than Brobeck Phleger & Harrison LLP, and any transfer taxes
payable in connection with the sale of its Stock to the Underwriters.
9. Conditions of Underwriters' Obligations. The respective obligations
of the Underwriters hereunder are subject to the accuracy, when made and on each
Delivery Date, of the representations and warranties of the Company and the
Selling Stockholder contained herein, to the performance by the Company and the
Selling Stockholder of their respective obligations hereunder, and to each of
the following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the Commission in
accordance with Section 6(a); no stop order suspending the effectiveness of
the Registration Statement, including any Rule 462(b) Registration
Statement, or any part thereof shall have been issued and no proceeding for
that purpose shall have been initiated or threatened by the Commission; and
any request of the Commission for inclusion of additional information in
the Registration Statement or the Prospectus or otherwise shall have been
complied with.
(b) No Underwriter shall have discovered and disclosed to the Company
on or prior to such Delivery Date that the Registration Statement, any Rule
462(b) Registration Statement, or the Prospectus or any amendment or
supplement thereto contains an untrue statement of a fact which, in the
reasonable opinion of Testa, Hurwitz & Thibeault, LLP, counsel for the
Underwriters, is material or omits to state a fact which, in the reasonable
opinion of such counsel, is material and is required to be stated therein
or is necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Custody Agreement,
the Power of Attorney, the Stock, the Registration Statement and the
Prospectus, and all other legal matters relating to this Agreement and the
transactions contemplated hereby shall be reasonably satisfactory in all
material respects to counsel for the Underwriters, and the Company and the
Selling Stockholder shall have furnished to such counsel all documents and
information that they may reasonably request to enable them to pass upon
such matters.
- 15 -
<PAGE>
(d) Brobeck Phleger & Harrison LLP shall have furnished to the
Representatives its written opinion, as counsel to the Company, addressed
to the Underwriters and dated such Delivery Date, in form and substance
reasonably satisfactory to the Representatives, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, is duly qualified to do business and is in
good standing as a foreign corporation in California, Florida, Illinois,
Massachusetts, Michigan, New Jersey, New York, Ohio, Pennsylvania and Texas
and has the corporate power and authority necessary to own or hold its
properties and to conduct its business as described in the Prospectus;
(ii) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the outstanding shares of capital stock of the
Company (including the shares of Stock being delivered on such Delivery
Date) have been duly authorized and validly issued, are fully paid and
non-assessable and conform to the description thereof contained in the
Prospectus;
(iii) There are no preemptive or other rights to subscribe for or
to purchase, nor any restriction upon the voting or transfer of, any shares
of the Stock pursuant to the Company's charter or by-laws or, to such
counsel's knowledge, pursuant to any agreement;
(iv) To such counsel's knowledge, there are no legal or
governmental proceedings pending to which the Company is a party or of
which any property or assets of the Company is the subject which are
required to be described in the Registration Statement or Prospectus and
are not so described; and, to such counsel's knowledge, no such proceedings
are threatened or contemplated by governmental authorities or threatened by
others which are required to be described in the Registration Statement or
Prospectus and are not so described;
(v) Such counsel has been orally advised by a member of the Staff
of the Commission that the Registration Statement, including any Rule
462(b) Registration Statement, was declared effective under the Securities
Act as of October __, 1996 as of _____ __.m. and _____, to such counsel's
knowledge, no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose is pending or
threatened by the Commission;
(vi) The Registration Statement, including any Rule 462(b)
Registration Statement, at the time it was declared effective, and the
Prospectus, as of the date of the Prospectus, and any further amendments or
supplements thereto, as of the date of such amendments or supplements, made
by the Company prior to such Delivery Date (other than the financial
statements and the related schedules therein and other financial and
statistical data, as to which such counsel need express no opinion) comply
as to form
- 16 -
<PAGE>
in all material respects with the requirements of the Securities Act and
the Rules and Regulations;
(vii) To such counsel's knowledge, there are no contracts or
other documents which are required to be described in the Prospectus or
filed as exhibits to the Registration Statement by the Securities Act or by
the Rules and Regulations which have not been described in the Prospectus
or filed as exhibits to the Registration Statement;
(viii) This Agreement has been duly authorized, executed and
delivered by the Company;
(ix) The issue and sale of the shares of Stock being delivered on
such Delivery Date by the Company and the compliance by the Company with
all of the provisions of this Agreement and the consummation of the
transactions contemplated hereby and the Stock Split will not, to such
counsel's knowledge, conflict with or constitute a breach of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument
known to such counsel to which the Company is a party or by which the
Company is bound or to which any of the property or assets of the Company
is subject, nor will such actions result in any violation of the provisions
of the charter or by-laws of the Company or, to such counsel's knowledge,
any statute or any order, rule or regulation known to such counsel of any
court or governmental agency or body having jurisdiction over the Company
or any of its properties or assets; and, except for the registration of the
Stock under the Securities Act and such consents, approvals,
authorizations, registrations or qualifications as may be required under
the Exchange Act, under the by-laws or rules of the National Association of
Securities Dealers, Inc. applicable to the corporate finance arrangements
contemplated hereby or under applicable state or foreign securities laws in
connection with the purchase and distribution of the Stock by the
Underwriters, no consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is
required for the execution, delivery and performance of this Agreement by
the Company and the consummation of the transactions contemplated hereby
and the Stock Split;
(x) To such counsel's knowledge, except as described in the
Prospectus, there are no contracts, agreements or understandings between
the Company and any person granting such person the right (other than
rights which have been waived or satisfied) to require the Company to file
a registration statement under the Securities Act with respect to any
securities of the Company owned or to be owned by such person or to require
the Company to include such securities in the securities registered
pursuant to the Registration Statement or in any securities being
registered pursuant to any other registration statement filed by the
Company under the Securities Act; and
(xi) Such counsel has no knowledge of any material default or any
event which, with notice or lapse of time or both, would constitute a
material default, in the due performance or observance of any term,
covenant or condition contained in any
- 17 -
<PAGE>
material indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company is a party or by which it is
bound or to which any of its properties or assets is subject, which default
would have a material adverse effect on the financial position,
stockholders' equity or results of operations of the Company.
In rendering such opinion, such counsel may state that its opinion is
limited to matters governed by the Federal laws of the United States of
America, the laws of the State of New York and the General Corporation Law
of the State of Delaware and that such counsel is not admitted in the State
of Delaware. Such counsel shall also have furnished to the Representatives
a written statement, addressed to the Underwriters and dated such Delivery
Date, in form and substance satisfactory to the Representatives, to the
effect that (x) such counsel has not acted as counsel to the Company on a
regular basis, but has acted as counsel to the Company in connection with
certain previous financing transactions and has acted as counsel to the
Company in connection with the preparation of the Registration Statement,
and (y) based on the foregoing, no facts have come to the attention of such
counsel which lead it to believe that (except for financial statements,
including the notes and schedule thereto, and other financial and
statistical data, as to which such counsel need express no opinion) the
Registration Statement, as of the Effective Date, contained any untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein
not misleading, or that (except for financial statements, including the
notes and schedule thereto, and other financial and statistical data, as to
which such counsel need express no opinion) the Prospectus contains any
untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The foregoing opinion and statement may be qualified by a
statement to the effect that such counsel has not independently checked or
verified, and does not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus except that such counsel shall state that the
statements under the caption "Description of Capital Stock," insofar as
such statements constitute a summary of legal matters, fairly present the
information called for with respect to such legal matters.
(e) Crummy, Del Deo, Dolan, Griffinger & Vecchione, patent counsel for
the Company, shall have furnished to the Representatives its written
opinion, addressed to the Underwriters and dated such Delivery Date, in
form and substance reasonably satisfactory to the Representatives to the
effect that:
(i) The statements in the Registration Statement and Prospectus
(x) under the caption "Risk Factors -- Limited Protection of Intellectual
Property Rights; Risk of Third Party Claims of Infringement;" and (y) under
the caption "Business -- Intellectual Property" and "-- Legal Proceedings"
insofar as such statements constitute summaries of matters of law, are
accurate and complete statements or summaries of the matters set forth
therein.
- 18 -
<PAGE>
(ii) To our knowledge, except as set forth in the Prospectus
there are no legal or governmental proceedings pending (other than patent
applications pending) relating to patents, patent applications, patent
rights, inventions, trade secrets, know-how, trademarks, trademark
applications, service marks, service mark applications, trade names,
copyrights or other information (collectively, "Intellectual Property")
owned or used by the Company, and to our knowledge, no such proceedings are
threatened or contemplated by governmental authorities or others, except as
set forth in the Prospectus.
(iii) We have no knowledge of any facts which would preclude the
Company from having valid license rights or clear title to the patents and
patent applications set forth on a schedule attached to its opinion (the
"Patent Schedule"). Based on representations by the Company that no
interests have been conveyed to third parties which have not been recorded
in the United States Patent and Trademark Office, the Company has clear
record title to the Company's United States patents and patent applications
identified in the Patent Schedule. To the best of our knowledge, the
Company has complied with the PTO duty of candor and disclosure for each of
the United States patent applications set forth on the Patent Schedule. We
have no knowledge of any facts that the Company lacks or will be unable to
obtain any rights or licenses to use all Intellectual Property necessary to
the conduct of its business as now or proposed to be conducted by the
Company as described in the Prospectus, except as described in the
Prospectus. We have no knowledge of any facts which form a basis for a
finding of unenforceability or invalidity of any of the patent rights owned
or licensed by the Company. We are unaware of any facts which would
preclude the grant of a patent from each of the patent applications set
forth on the Patent Schedule. To the best of our knowledge, the Company has
not received any notice of infringement or of conflict with rights or
claims of others with respect to any Intellectual Property owned or used by
it which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, could result in any material adverse effect
upon the Company, except as described in the Prospectus. We have no
knowledge of any patent rights of others which are or would be infringed by
specific products or processes referred to in the Prospectus in such a
manner as to materially and adversely affect the Company, except as
described in the Prospectus.
(iv) We have reviewed the specification, file history and claims
of U.S. Patent No. 4,905,273 to Gordon, et al., and are of the opinion that
certain of the claims therein should not be construed broadly enough to be
infringed by any of a set of services provided by FaxSav Incorporated which
were considered in the course of that review. The FaxSav services which we
considered are: faxSAV(R) Service (basic service), Global Network Service,
faxSAV for Internet Service and faxSAV for Windows Service. (The functions
and parameters of those services which were considered in our review are
described in an opinion letter to FaxSav Incorporated in respect to this
patent dated June 17, 1996.) As to the remaining claims other than
- 19 -
<PAGE>
those certain claims, we conducted a review of prior art which appeared
relevant to the issues of novelty and non-obviousness (under ss.102 and
ss.103 of the Patent Act) for the remaining claims and which in our opinion
should be considered by a tribunal engaged to determine the validity of the
remaining claims. Based on that review, and an analysis of the considered
prior art in light of the patentability criteria of ss.102 and ss.103, we
have formed a judgment that each of the remaining claims was either
anticipated by, or obvious in light of the prior art, and thus that each of
the remaining claims are invalid. Accordingly, having reached a judgment
that the claims in U.S. Patent No. 4,905,273 other than those claims which
should not be construed to be infringed by FaxSav services known to and
considered by us are themselves invalid, we express the opinion that there
are no valid claims in that patent which would be infringed by the FaxSav
services known to and considered by us.
(v) [Audio Fax opinion similar to (iv) above]
(vi) The Company is listed in the records of the appropriate
patent office(s) as the owner of record of the patents and patent
applications set forth in the Patent Schedule.
(vii) To our knowledge, there are no contracts or other documents
relating to Intellectual Property of a character required to be filed as an
exhibit to the Registration Statement or required to be described in the
Registration Statement or Prospectus that are not filed or described as
required.
(viii) Although we have not verified the accuracy or completeness
of the statements contained in the Prospectus, nothing has come to our
attention that causes us to believe that at the time the Registration
Statement became effective, or at any Time of Delivery, as the case may be
the Prospectus (i) under the Caption "Risk Factors -- Limited Protection of
Intellectual Property Rights; Risk of Third Party Claims of Infringement;"
and (ii) under the caption "Business -- Intellectual Property" and "--Legal
Proceedings" contained any untrue statement of a material fact or omitted
to state a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading.
(f) John Ligon, Esq. shall have furnished to the Representatives his
written opinion, as special counsel to the Company, addressed to the
Underwriters and dated such Delivery Date, in form and substance reasonably
satisfactory to the Representatives to the effect that:
(i) The Company owns or possesses and is operating in compliance
with the terms, provisions and conditions of all necessary licenses,
certificates and permits required by the Federal Communications Commission
(the "FCC") or similar state regulatory agencies for the conduct of its
business as described in the Prospectus.
- 20 -
<PAGE>
(ii) To my knowledge, there is no materially adverse judgment,
decree or order that has been issued by the FCC or any similar state
regulatory agency specifically against the Company; nor are there any
actions, proceedings or investigations pending before the FCC or any
similar state regulatory agency or, to my knowledge, threatened (or any
basis therefore) by the FCC or any similar state regulatory agency against
the Company which may cause any license, certificate or permit that is
material to the conduct of the business of the Company as presently
conducted to be revoked, withdrawn, cancelled, suspended or not renewed, or
which, if adversely determined, would have a material adverse effect on the
Company's financial position, business or results of operations.
(iii) No approval, consent, order, authorization, designation,
registration, declaration, waiver or filing of or with the FCC or any
similar state regulatory agency is required in connection with the initial
public offering of shares of Common Stock of the Company.
(iv) The statements in the Registration Statement and Prospectus
(x) under the caption "Risk Factors -- Government Regulation" and (y) under
the caption Business -- Government Regulation," insofar as such statements
constitute summaries of matters of law, are accurate and complete
statements or summaries of the matters set forth therein.
(g) The Representatives shall have received from Testa, Hurwitz &
Thibeault, LLP, counsel for the Underwriters, such opinion or opinions,
dated such Delivery Date, with respect to the issuance and sale of the
Stock, the Registration Statement, the Prospectus and other related matters
as the Representatives may reasonably require, and the Company shall have
furnished to such counsel such documents as they reasonably request for the
purpose of enabling them to pass upon such matters.
(h) At the time of execution of this Agreement, the Representatives
shall have received from Coopers & Lybrand L.L.P. a letter, in form and
substance satisfactory to the Representatives, addressed to the
Underwriters and dated the date hereof (i) confirming that they are
independent public accountants within the meaning of the Securities Act and
are in compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, (ii) stating, as of the date hereof (or, with respect to
matters involving changes or developments since the respective dates as of
which specified financial information is given in the Prospectus, as of a
date not more than five days prior to the date hereof), the conclusions and
findings of such firm with respect to the financial information and other
matters ordinarily covered by accountants' "comfort letters" to
underwriters in connection with registered public offerings.
(i) With respect to the letter of Coopers & Lybrand L.L.P. referred to
in the preceding paragraph and delivered to the Representatives
concurrently with the execution of this Agreement (the "initial letter"),
the Company shall have furnished to the
- 21 -
<PAGE>
Representatives a letter (the "bring-down letter") of such accountants,
addressed to the Underwriters and dated such Delivery Date (i) confirming
that they are independent public accountants within the meaning of the
Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of Regulation
S-X of the Commission, (ii) stating, as of the date of the bring-down
letter (or, with respect to matters involving changes or developments since
the respective dates as of which specified financial information is given
in the Prospectus, as of a date not more than five days prior to the date
of the bring-down letter), the conclusions and findings of such firm with
respect to the financial information and other matters covered by the
initial letter and (iii) confirming in all material respects the
conclusions and findings set forth in the initial letter.
(j) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, of its Chairman of the Board, its
President or a Vice President and its chief financial officer stating that:
(i) The representations, warranties and agreements of the Company
in Section 1 are true and correct in all material respects as of such
Delivery Date; the Company has complied in all material respects with all
its agreements contained herein; and the conditions set forth in Sections
9(a) and 9(m) have been fulfilled; and
(ii) They have carefully examined the Registration Statement and
the Prospectus and, in their opinion (A) as of the Effective Date, the
Registration Statement and Prospectus did not include any untrue statement
of a material fact and did not omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading,
and (B) since the Effective Date no event has occurred which should have
been set forth in a supplement or amendment to the Registration Statement
or the Prospectus.
(k) (i) The Company shall not have sustained since the date of the
latest audited financial statements included in the Prospectus any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus or (ii) since such date there shall not
have been any change in the capital stock or long-term debt of the Company
or any change, or any development involving a prospective change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company, otherwise
than as set forth or contemplated in the Prospectus, the effect of which,
in any such case described in clause (i) or (ii), is, in the reasonable
judgment of the Representatives, so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Stock being delivered on such Delivery Date on the terms
and in the manner contemplated in the Prospectus.
(l) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York
- 22 -
<PAGE>
Stock Exchange or the American Stock Exchange or in the over-the-counter
market, or trading in any securities of the Company on any exchange or in
the over-the-counter market, shall have been suspended or minimum prices
shall have been established on any such exchange or such market by the
Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a banking moratorium shall
have been declared by Federal or state authorities, (iii) the United States
shall have become engaged in hostilities, there shall have been an
escalation in hostilities involving the United States or there shall have
been a declaration of a national emergency or war by the United States or
(iv) there shall have occurred such a material adverse change in general
economic, political or financial conditions (or the effect of international
conditions on the financial markets in the United States shall be such) as
to make it, in the reasonable judgment of a majority in interest of the
several Underwriters, impracticable or inadvisable to proceed with the
public offering or delivery of the Stock being delivered on such Delivery
Date on the terms and in the manner contemplated in the Prospectus.
(m) The Nasdaq National Market shall have approved the Stock for
listing, subject only to official notice of issuance and evidence of
satisfactory distribution.
(n) The counsel for the Selling Stockholder shall have furnished to
the Representatives its written opinion, as counsel to the Selling
Stockholder, addressed to the Underwriters and dated the Second Delivery
Date, in form and substance reasonably satisfactory to the Representatives,
to the effect that:
(i) The Selling Stockholder has full right, power and authority
to enter into this Agreement, the Power of Attorney and the Custody
Agreement; the execution, delivery and performance of this Agreement, the
Power of Attorney and the Custody Agreement by the Selling Stockholder and
the consummation by the Selling Stockholder of the transactions
contemplated hereby and thereby will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any statute, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such counsel to which
the Selling Stockholder is a party or by which the Selling Stockholder is
bound or to which any of the property or assets of the Selling Stockholder
is subject, nor will such actions result in any violation of the provisions
of the charter or by-laws of the Selling Stockholder, or any statute or any
order, rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over the Selling
Stockholder or the property or assets of the Selling Stockholder; and,
except for the registration of the Stock under the Securities Act and such
consents, approvals, authorizations, registrations or qualifications as may
be required under the Exchange Act and applicable state or foreign
securities laws in connection with the purchase and distribution of the
Stock by the Underwriters, no consent, approval, authorization or order of,
or filing or registration with, any such court or governmental agency or
body is required for the execution, delivery and performance of this
Agreement, the Power of Attorney or the Custody Agreement by the Selling
Stockholder and the consummation by the Selling Stockholder of the
transactions contemplated hereby and thereby;
- 23 -
<PAGE>
(ii) This Agreement has been duly authorized, executed and
delivered by or on behalf of the Selling Stockholder;
(iii) A Power-of-Attorney and a Custody Agreement have been duly
authorized, executed and delivered by the Selling Stockholder and
constitute valid and binding agreements of the Selling Stockholder,
enforceable in accordance with their respective terms;
(iv) Immediately prior to the Second Delivery Date, the Selling
Stockholder had good and valid title to the shares of Stock to be sold by
the Selling Stockholder under this Agreement, free and clear of all liens,
encumbrances, equities or claims, and full right, power and authority to
sell, assign, transfer and deliver such shares to be sold by the Selling
Stockholder hereunder; and
(v) Good and valid title to the shares of Stock to be sold by the
Selling Stockholder under this Agreement, free and clear of all liens,
encumbrances, equities or claims has been transferred to each of the
several Underwriters.
In rendering such opinion, such counsel may (i) state that its opinion
is limited to matters governed by the Federal laws of the United States of
America, the laws of the state in which such counsel practices and the
corporate law in the state in which the Selling Stockholder is organized
and that such counsel is not admitted in such jurisdiction(s) and (ii) in
rendering the opinion in Section 9(n)(iv) above, rely upon a certificate of
the Selling Stockholder in respect of matters of fact as to ownership of
and liens, encumbrances, equities or claims on the shares of Stock sold by
such Selling Stockholder, provided that such counsel shall furnish copies
thereof to the Representatives and state that it believes that both the
Underwriters and it are justified in relying upon such certificate. The
foregoing opinion may be qualified by a statement to the effect that such
counsel does not assume any responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration Statement or
the Prospectus.
(o) The Selling Stockholder (or the Custodian or one or more
attorneys-in-fact on behalf of the Selling Stockholder) shall have
furnished to the Representatives on the Second Delivery Date, a
certificate, dated the Second Delivery Date, signed by, or on behalf of,
the Selling Stockholder (or the Custodian or one or more attorneys-in-fact)
stating that the representations, warranties and agreements of the Selling
Stockholder contained herein are true and correct as of the Second Delivery
Date and that the Selling Stockholder has complied with all agreements
contained herein to be performed by the Selling Stockholder at or prior to
the Second Delivery Date.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
- 24 -
<PAGE>
10. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each Underwriter,
its officers and employees and each person, if any, who controls any Underwriter
within the meaning of the Securities Act, from and against any loss, claim,
damage or liability, joint or several, or any action in respect thereof
(including, but not limited to, any loss, claim, damage, liability or action
relating to purchases and sales of Stock), to which that Underwriter, officer,
employee or controlling person may become subject, under the Securities Act or
otherwise, insofar as, such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained (A) in any Preliminary Prospectus, the Registration
Statement or the Prospectus or in any amendment or supplement thereto or (B) in
any blue sky application or other document prepared or executed by the Company
(or based upon any written information furnished by the Company) specifically
for the purpose of qualifying any or all of the Stock under the securities laws
of any state or other jurisdiction (any such application, document or
information being hereinafter called a "Blue Sky Application"), (ii) the
omission or alleged omission to state in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any amendment or supplement
thereto, or in any Blue Sky Application any material fact required to be stated
therein or necessary to make the statements therein not misleading, or (iii) any
act or failure to act or any alleged act or failure to act by any Underwriter in
connection with, or relating in any manner to, the Stock or the offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, damage, liability or action arising out of or based upon matters
covered by clause (i) or (ii) above (provided that the Company and the Selling
Stockholder shall not be liable under this clause (iii) to the extent that it is
determined in a final judgment by a court of competent jurisdiction that such
loss, claim, damage, liability or action resulted directly from any such acts or
failures to act undertaken or omitted to be taken by such Underwriter through
its gross negligence or willful misconduct), and shall reimburse each
Underwriter and each such officer, employee or controlling person promptly upon
demand for any legal or other expenses reasonably incurred by that Underwriter,
officer, employee or controlling person in connection with investigating or
defending or preparing to defend against such loss, claim, damage, liability or
action as such expenses are incurred; and, provided, further, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage, liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus, the Registration Statement or the Prospectus, or in
any such amendment or supplement, or in any Blue Sky Application, in reliance
upon and in conformity with written information furnished to the Company through
the Representatives by or on behalf of any Underwriter specifically for
inclusion therein and, provided, further, however, that the indemnity agreement
provided in this Section 10(a) with respect to any Preliminary Prospectus shall
not inure to the benefit of any Underwriter from whom the person asserting any
losses, claims, damages, liabilities or actions based upon any untrue statement
or alleged untrue statement or omission or alleged omission purchased Stock, if
the Company demonstrates that a copy of the Prospectus in which such untrue
statement or alleged untrue statement or omission or alleged omission was
corrected had not been sent or given to such person within the time required by
the Securities Act and the Rules and Regulations and that the provisim thereof
would have
- 25 -
<PAGE>
eliminated the liability, unless such failure is the result of noncompliance by
the Company with Section 6(c) hereof. The foregoing indemnity agreement is in
addition to any liability which the Company may otherwise have to any
Underwriter or to any officer, employee or controlling person of that
Underwriter.
(b) The Selling Stockholder, jointly and severally with the Company,
shall indemnify and hold harmless each Underwriter, its officers and employees,
and each person, if any, who controls any Underwriter within the meaning of the
Securities Act, from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof (including, but not limited to, any
loss, claim, damage, liability or action relating to purchases and sales of
Stock), to which that Underwriter, officer, employee or controlling person may
become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus or in any
amendment or supplement thereto or (ii) the omission or alleged omission to
state in any Preliminary Prospectus, Registration Statement or the Prospectus,
or in any amendment or supplement thereto, any material fact required to be
stated therein or necessary to make the statements therein not misleading, and
shall reimburse each Underwriter, its officers and employees and each such
controlling person for any legal or other expenses reasonably incurred by that
Underwriter, its officers and employees or controlling person promptly upon
demand in connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that neither the Selling Stockholder nor the
Company shall be liable in any such case to the extent that any such loss,
claim, damage, liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus, the Registration Statement or the Prospectus or in
any such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company through the Representatives by or on behalf
of any Underwriter specifically for inclusion therein; and, provided, further,
that the aggregate liability of the Selling Stockholder under this Section 10(b)
shall not exceed the proceeds (net of underwriting discounts) received by the
Selling Stockholder from the sale of shares of Stock under this Agreement; and,
provided, further, however, that the indemnity agreement provided in this
Section 10(b) with respect to any Preliminary Prospectus shall not inure to the
benefit of any Underwriter from whom the person asserting any losses, claims,
damages, liabilities or actions based upon any untrue statement or alleged
untrue statement or omission or alleged omission purchased Stock, if the Company
demonstrates that a copy of the Prospectus in which such untrue statement or
alleged untrue statement or omission or alleged omission was corrected had not
been sent or given to such person within the time required by the Securities Act
and the Rules and Regulations and that the provisim thereof would have
eliminated the liability, unless such failure is the result of noncompliance by
the Company with Section 6(c) hereof. Notwithstanding anything to the contrary
in this paragraph (b), including the joint and several nature of the obligations
of the Company and the Selling Stockholder, the Selling Stockholder shall not be
required to provide indemnification to an indemnified person until such
indemnified person shall have first made a reasonable effort to enforce its
indemnification rights under this Section 10 against the Company with respect to
such loss, claim, damage, liability or expenses and the Company shall have
failed to provide such indemnification to the indemnified person.
- 26 -
<PAGE>
The foregoing indemnity agreement is in addition to any liability which the
Selling Stockholder may otherwise have to any Underwriter or any officer,
employee or controlling person of that Underwriter.
(c) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company and the Selling Stockholder, their respective officers
and employees, each of their respective directors, and each person, if any, who
controls the Company or the Selling Stockholder within the meaning of the
Securities Act, from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof, to which the Company or any such
director, officer or controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained (A) in any Preliminary Prospectus, the
Registration Statement or the Prospectus or in any amendment or supplement
thereto, or (B) in any Blue Sky Application or (ii) the omission or alleged
omission to state in any Preliminary Prospectus, the Registration Statement or
the Prospectus, or in any amendment or supplement thereto, or in any Blue Sky
Application any material fact required to be stated therein or necessary to make
the statements therein not misleading, but in each case only to the extent that
the untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information furnished
to the Company through the Representatives by or on behalf of that Underwriter
specifically for inclusion therein, and shall reimburse the Company and any such
director, officer or controlling person promptly upon demand for any legal or
other expenses reasonably incurred by the Company or any such director, officer
or controlling person in connection with investigating or defending or preparing
to defend against any such loss, claim, damage, liability or action as such
expenses are incurred. The foregoing indemnity agreement is in addition to any
liability which any Underwriter may otherwise have to the Company or any such
director, officer, employee or controlling person.
(d) Promptly after receipt by an indemnified party under this Section
10 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 10, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 10 except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 10.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 10 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Representatives shall have the right to employ counsel to represent jointly
the Representatives and those other Underwriters and their respective
- 27 -
<PAGE>
officers, employees and controlling persons who may be subject to liability
arising out of any claim in respect of which indemnity may be sought by the
Underwriters against the Company or the Selling Stockholder under this Section
10 if, in the reasonable judgment of the Representatives, it is advisable for
the Representatives and those Underwriters, officers, employees and controlling
persons to be jointly represented by separate counsel, and in that event the
fees and expenses of such separate counsel shall be paid by the Company or the
Selling Stockholder. No indemnifying party shall (i) without, the prior written
consent of the indemnified parties (which consent shall not be unreasonably
withheld), settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising out
of such claim, action, suit or proceeding, or (ii) be liable for any settlement
of any action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with the consent of the indemnifying
party or if there be a final judgment of the plaintiff in any such action, the
indemnifying party agrees to indemnify and hold harmless any indemnified party
in accordance with the provisions of this Section 10 from and against any loss
or liability by reason of such settlement or judgment.
(e) If the indemnification provided for in this Section 10 shall for
any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 10(a), 10(b) or 10(c) in respect of any loss, claim, damage
or liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party a result of
such loss, claim, damage or liability, or action in respect thereof, (i) in such
proportion as shall be appropriate to reflect the relative benefits received by
the Company and the Selling Stockholder on the one hand and the Underwriters on
the other from the offering of the Stock or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and the Selling Stockholder on
the one hand and the Underwriters on the other with respect to the statements or
omissions which resulted in such loss, claim, damage or liability, or action in
respect thereof, as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Selling Stockholder on the one
hand and the Underwriters on the other with respect to such offering shall be
deemed to be in the same proportion as the total net proceeds from the offering
of the Stock purchased under this Agreement (before deducting expenses) received
by the Company and the Selling Stockholder, on the one hand, and the total
underwriting discounts and commissions received by the Underwriters with respect
to the shares of the Stock purchased under this Agreement, on the other hand,
bear to the total gross proceeds from the offering of the shares of the Stock
under this Agreement, in each case as set forth in the table on the cover page
of the Prospectus. The relative fault shall be determined by reference to
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company, the Selling Stockholder or the Underwriters, the intent of the parties
and their relative knowledge, access to information and opportunity to correct
or prevent such statement or omission. The Company, the Selling Stockholder and
the Underwriters agree that it
- 28 -
<PAGE>
would not be just and equitable if contributions pursuant to this Section were
to be determined by pro rata allocation (even if the Underwriters were treated
as one entity for such purpose) or by any other method of allocation which does
not take into account the equitable considerations referred to herein. The
amount paid or payable by an indemnified party as a result of the loss, claim,
damage or liability, or action in respect thereof, referred to above in this
Section shall be deemed to include, for purposes of this Section 10(e), any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 10(e), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Stock underwritten by it and distributed to the public was
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise paid or become liable to pay by reason of any untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 10(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute as
provided in this Section 10(e) are several in proportion to their respective
underwriting obligations and not joint.
(f) The Underwriters severally confirm and the Company and the Selling
Stockholders acknowledge and agree that the statements with respect to the
public offering of the Stock by the Underwriters set forth on the cover page of,
the legend concerning over-allotments on the inside front cover page and the
information contained in the third, sixth and eighth paragraphs appearing under
the caption "Underwriting" in, the Prospectus are correct and constitute the
only information furnished in writing to the Company by or on behalf of the
Underwriters specifically for inclusion in the Registration Statement and the
Prospectus.
11. Defaulting Underwriters.
If, on either Delivery Date, any Underwriter defaults in the
performance of its obligations under this Agreement, the remaining
non-defaulting Underwriters shall be obligated to purchase the Stock which the
defaulting Underwriter agreed but failed to purchase on such Delivery Date in
the respective proportions which the number of shares of the Firm Stock set
opposite the name of each remaining non-defaulting Underwriter in Schedule 1
hereto bears to the total number of shares of the Firm Stock set opposite the
names of all the remaining non-defaulting Underwriters in Schedule I hereto;
provided, however, that the remaining non-defaulting Underwriters shall not be
obligated to purchase any of the Stock on such Delivery Date if the total number
of shares of the Stock which the defaulting Underwriter or Underwriters agreed
but failed to purchase on such date exceeds 9.09% of the total number of shares
of the Stock to be purchased on such Delivery Date, and any remaining
non-defaulting Underwriter shall not be obligated to purchase more than 110% of
the number of shares of the Stock which it agreed to purchase on such Delivery
Date pursuant to the terms of Section 3. If the foregoing maximums are exceeded,
the remaining non-defaulting Underwriters, or those other underwriters
satisfactory to the Representatives who so agree, shall have the right, but
shall not be obligated, to purchase, in such proportion as may be agreed upon
among them, all the Stock to be purchased on such Delivery Date. If the
remaining Underwriters or other underwriters satisfactory to the Representatives
do not elect to purchase the shares which the defaulting Underwriter or
Underwriters agreed but
- 29 -
<PAGE>
failed to purchase on such Delivery Date, this Agreement (or, with respect to
the Second Delivery Date, the obligation of the Underwriters to purchase, and of
the Selling Stockholder to sell, the Option Stock) shall terminate without
liability on the part of any non-defaulting Underwriter or the Company or the
Selling Stockholder, except that the Company will continue to be liable for the
payment of expenses to the extent set forth in Sections 8. As used in this
Agreement, the term "Underwriter" includes, for all purposes of this Agreement
unless the context requires otherwise, any party not listed in Schedule 1 hereto
who, pursuant to this Section 11, purchases Firm Stock which a defaulting
Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any liability
it may have to the Company and the Selling Stockholder for damages caused by its
default. If other underwriters are obligated or agree to purchase the Stock of a
defaulting or withdrawing Underwriter, either the Representatives or the Company
may postpone the Delivery Date for up to seven full business days in order to
effect any changes that in the opinion of counsel for the Company or counsel for
the Underwriters may be necessary in the Registration Statement, the Prospectus
or in any other document or arrangement.
12. Termination. The obligations of the Underwriters hereunder may be
terminated by the Representatives by notice given to and received by the Company
prior to delivery of and payment for the Firm Stock if, prior to that time, any
of the events described in Sections 9(k) or 9(l), shall have occurred or the
event described in Section 9(m) shall not have occurred or if the Underwriters
shall decline to purchase the Stock for any reason permitted under this
Agreement. The representations, warranties and obligations, as well as the
rights and benefits, of the Selling Stockholder hereunder shall terminate if the
option granted in Section 3 hereof is not exercised on or before the thirtieth
day after the date of this Agreement.
13. Reimbursement of Underwriters' Expenses. If (a) the Company or the
Selling Stockholder shall fail to tender the Stock for delivery to the
Underwriters by reason of any failure, refusal or inability on the part of the
Company or the Selling Stockholder to perform any agreement on its part to be
performed, or because any other condition of the Underwriters' obligations
hereunder required to be fulfilled by the Company or the Selling Stockholder is
not fulfilled, the Company or the Selling Stockholder, as the case may be, will
reimburse the Underwriters for all reasonable out-of-pocket expenses (including
reasonable fees and disbursements of counsel) incurred by the Underwriters in
connection with this Agreement and the proposed purchase of the Stock, and upon
demand the Company or the Selling Stockholder, as the case may be, shall pay the
full amount thereof to the Representatives. If this Agreement is terminated
pursuant to Section 11 by reason of the default of one or more Underwriters,
neither the Company nor the Selling Stockholder shall be obligated to reimburse
any Underwriter on account of those expenses.
14. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail, telex
or facsimile transmission to Lehman Brothers Inc., Three World Financial
Center, New York, New
- 30 -
<PAGE>
York 10285, Attention: Syndicate Department (Fax: 212-526-6588), with a
copy, in the case of any notice pursuant to Section 11(d), to the Director
of Litigation, Office of the General Counsel, Lehman Brothers Inc., 3 World
Financial Center, 10th Floor, New York, NY 10285, with a copy to Testa,
Hurwitz & Thibeault, LLP, 125 High Street, High Street Tower, Boston,
Massachusetts 02110, Attention: Gordon H. Hayes, Esq.;
(b) if to the Company, shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: President (Fax: 908-906-1008) with a
copy to Brobeck Phleger & Harrison LLP, 1301 Avenue of the Americas, New
York, New York 10019, Attention: Richard R. Plumridge, Esq.;
(c) if to the Selling Stockholder, shall be delivered or sent by mail,
telex or facsimile transmission to the Selling Stockholder at
_____________________________;
provided, however, that any notice to an Underwriter pursuant to Section 10(d)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company and the
Selling Stockholder shall be entitled to act and rely upon any request, consent,
notice or agreement given or made on behalf of the Underwriters by Lehman
Brothers Inc. on behalf of the Representatives and the Company and the
Underwriters shall be entitled to act and rely upon any request, consent, notice
or agreement given or made on behalf of the Selling Stockholder by the
Custodian.
15. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, the Company, the
Selling Stockholder and their respective personal representatives and
successors. This Agreement and the terms and provisions hereof are for the sole
benefit of only those persons, except that (A) the representations, warranties,
indemnities and agreements of the Company and the Selling Stockholder contained
in this Agreement shall also be deemed to be for the benefit of the person or
persons, if any, who control any Underwriter within the meaning of Section 15 of
the Securities Act and (B) the indemnity agreement of the Underwriters contained
in Section 10(c) of this Agreement shall be deemed to be for the benefit of
directors of the Company, officers of the Company who have signed the
Registration Statement and any person controlling the Company within the meaning
of Section 15 of the Securities Act. Nothing in this Agreement is intended or
shall be construed to give any person, other than the persons referred to in
this Section 15, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.
16. Survival. The respective indemnities, representations, warranties
and agreements of the Company, the Selling Stockholder and the Underwriters
contained in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall survive the delivery of and payment for the
Stock and shall remain in full force and effect, regardless of any investigation
made by or on behalf of any of them or any person controlling any of them.
- 31 -
<PAGE>
17. Definition of the Terms "Business Day" and "Subsidiary". For
purposes of this Agreement, (a) "business day" means any day on which the New
York Stock Exchange, Inc. is open for trading and (b) "subsidiary" has the
meaning set forth in Rule 405 of the Rules and Regulations.
18. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of New York.
19. Jurisdiction. The parties hereto each hereby irrevocably submits
to the jurisdiction of any New York state or federal court sitting in the city
of New York, New York County, in any action or proceeding arising out of or
relating to this Agreement and the parties hereto each hereby irrevocably agrees
that all claims in respect of such action or proceeding may be heard and
determined in such New York state court or such federal court. The parties
hereto also each hereby irrevocably waives, to the fullest extent it may
effectively do so, the defense of an inconvenient forum to the maintenance of
such action or proceeding. The parties hereto each irrevocably consent to the
service of copies of the summons and complaint and any other process which may
be served in any such action or proceeding by certified mail, return receipt
requested, or by delivery of a copy of such process to the parties at its
address specified in Section 14 or by any other method permitted by law. The
parties hereto each agree that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or by any other manner provided by law.
20. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
21. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
[Remainder of Page Intentionally Left Blank]
- 32 -
<PAGE>
If the foregoing correctly sets forth the agreement among the Company,
the Selling Stockholder and the Underwriters, please indicate your acceptance in
the space provided for that purpose below.
Very truly yours,
FAXSAV INCORPORATED
By________________________
President
The Selling Stockholder
By______________________
Attorney-in-Fact
Accepted:
LEHMAN BROTHERS INC.
ALEX. BROWN & SONS INCORPORATED
For themselves and as
Representatives of the
several Underwriters
named in Schedule 1 hereto
By: LEHMAN BROTHERS INC.
BY__________________________
Authorized Representative
- 33 -
<PAGE>
SCHEDULE 1
Underwriters Number of Shares
Lehman Brothers Inc..................................
Alex. Brown & Sons Incorporated......................
Total................................................ _______________
<PAGE>
EXHIBIT 5.1
October 7, 1996
FaxSav Incorporated
399 Thornall Street
Edison, New Jersey 08837
Ladies and Gentlemen:
We have assisted in the preparation and filing by FaxSav
Incorporated (the "Company") of a Registration Statement on Form S-1, as amended
through October 7, 1996 (the "Registration Statement"), with the Securities and
Exchange Commission, relating to the sale of up to 2,530,000 shares (the
"Shares") of Common Stock, $0.01 par value (the "Common Stock"), of the Company.
A form of underwriting agreement (the "Underwriting Agreement") is filed as an
exhibit to the Registration Statement. The Registration Statement relates to
2,200,000 Shares to be issued and sold by the Company (the "Company Shares") and
330,000 Shares to be sold by a stockholder (the "Selling Stockholder Shares").
We have examined such records and documents and have made such
examination of laws as we considered necessary to form a basis for the opinion
set forth herein. In our examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals, and
the conformity with the originals of all documents submitted to us as copies
thereof.
Based upon and subject to the foregoing, we are of the opinion that
(i) the Shares have been duly authorized, (ii) the Selling Stockholder Shares
have been validly issued and are fully paid and nonassessable and (iii) the
Company Shares, when issued, sold and paid for in accordance with the terms of
the Underwriting Agreement, will be validly issued, fully paid and
nonassessable.
We hereby consent to the use of our name in the Registration
Statement under the caption "Legal Matters" in the
<PAGE>
FaxSav Incorporated October 7, 1996
Page 2
related Prospectus and consent to the filing of this opinion as
an exhibit thereto.
Very truly yours,
BROBECK, PHLEGER & HARRISON LLP
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this Registration Statement on Form S-1 of
FaxSav Incorporated of our reports dated March 29, 1996, on our audits of the
financial statements and financial statement schedule of FaxSav Incorporated
(formerly Digitran Corporation). We also consent to the reference to our firm
under the caption "Experts."
COOPERS & LYBRAND L.L.P.
Parsippany, New Jersey
October 3, 1996
